On the Money with Secure Money: Episode 60

To see a full schedule of our TV airtimes, please click here.

Video Transcript

Cynthia de Fazio – 00:20

And welcome to On The money with secure money. My name is Cynthia De Fazio and I’m joined today by Brian Quaranta. He is president and founder of secure money advisors, as well as Neil, major senior investment advisor. Brian, how are you?

Brian Quaranta – 00:33

Cynthia, we’re doing great. How are you today?

Cynthia de Fazio – 00:35

Fantastic. Thank you so much for asking. And Neil, how are you?

Neil Major – 00:38

I’m well, Cynthia, how are you today?

Cynthia de Fazio – 00:39

Doing great. And I’m happy to see we’re all in blue. ahead of time. Right, you have some exciting news to talk about. You have a new baby on the way.

Brian Quaranta – 00:51

we do. Yes, we sure do. Yes. It’s very exciting news. I don’t know. I mean, we’ll see. I always tell people, you know, if you’re looking for an advisor, that’s going to be around a long time. Choose the guy that’s 45 habitus. Second kid, right?

Cynthia de Fazio – 01:05

I love it.

Brian Quaranta – 01:08

I’ll see your plan through to the day you die.

Cynthia de Fazio – 01:09

I love it. So lots of family. Yeah,

Brian Quaranta – 01:14

we’re, we’re really, really excited about it. I mean, it’s a very exciting time in our lives. And, you know, building secure money advisors was my baby. Yeah, and doing this now going on almost 23 years, it was just me in the business and my team. You know, becoming a dad later on in life has been a great thing. Of course, because, you know, my kids get the very best version of me. And, you know, I put my heart and soul into growing secure money advisors into what it’s today, so, so it’s exciting for me to become a father. But you know, just as much as I love watching my kids grow, I also like watching secure money advisors grow show. And that’s what we continue to do with the TV show and the radio show and all the educational events that we do.

Cynthia de Fazio – 02:02

I love that. And how many team members do you have now?

Brian Quaranta – 02:05

I think we’re up to about 12 or 15. Now, so we keep growing. And it’s all a good thing. Because, you know, we the one thing that really separates us in this financial industry, everybody can talk to you about how to invest your money, not a lot of people can teach you how to use your money and get your money working for you. And that’s one area where we separate ourselves. But the other big areas through servicing, because we’ve built such a dynamic team. And because each individual that chooses to hire secure money advisors gets access to that dedicated team, they get a level of service, and attention that you might not normally get at another firm.

Cynthia de Fazio – 02:42

I love that. I love that. Thank you, Brian and Neil, how’s your beautiful family?

Neil Major – 02:46

Oh, they’re doing great doing great. To two girls, I have twins. They’re eight. They’re in second grade things that they’re into these days. It’s a lot of fun. A lot of fun to watch them grow. And

Cynthia de Fazio – 03:00

you know, and didn’t they just build it fast? In the blink of an eye, but didn’t they just build their own video games at school? Yeah, they’re telling your wife

Neil Major – 03:09

or kids are learning these days?

Cynthia de Fazio – 03:10

Learning myself?

Neil Major – 03:13

Problem, I have them figure it out for me. Yeah, it’s pretty neat to watch kids grow.

Cynthia de Fazio – 03:20

It’s amazing. It truly is such a blessing. And, Brian, I should ask you obviously talking about the most important topic today planning properly for retirement, any top questions that are coming to the surface for people that you’re talking to lately?

Brian Quaranta – 03:33

Yeah, I mean, they’re pretty common a year after year after year. I mean, because we work with people that are 55. And older. Now we work with younger people, because clients refer their kids to us, and so on and so forth. But our real specialty comes for those that are 55 and older. And we hear the same questions over and over every year. You know, do I have enough money to retire? My going to have enough money to be able to live off of so I don’t run out of money? I need to know when to take Social Security. I don’t have a pension. That you know, these are common things that we hear week after week, month after month. So those are the probably the biggest concerns that we hear. But the biggest one is I have a 401k I don’t have a pension. I want to retire. How do I do it? That’s the big one. And that’s really where we have a special skill set and teaching people how to take that money and turn it into a paycheck for them.

Cynthia de Fazio – 04:25

Because again, we’ve always talked about this in the past, the number one fear that most people have is running out of money. Yes, people want it absolutely isn’t

Brian Quaranta – 04:33

the worst day retirements not the day you run out. The worst day every time is the day you figure out you are gonna run out of money. There’s nothing you can do to stop it. So with a plan, you should never be put in that situation show because a plan is going to tell you exactly what you can and can’t do.

Cynthia de Fazio – 04:47

Okay. All right. Well, we have viewer questions today for today’s topic of the show. What do you think about that because they have been waiting patiently?

Brian Quaranta – 04:55

Yes, I do have more questions and one of your questions don’t get answered. Please feel free to email us you can go to secure money advisors comm don’t forget to watch our radio show, or I’m sorry, listen to our radio show, we can’t watch a radio show. And then of course, you can also go to our website, go to our events tab and come to one of our educational events.

Cynthia de Fazio – 05:15

Right, thank you so much. Well, Neil, I’m gonna guide this first question to you if that’s okay. It says, Neil, as a debit. Is it difficult to do a Roth conversion on an IRA? Is it difficult to do?

Neil Major – 05:25

Well, it’s so difficult, right? I mean, it’s just a matter of does it make sense for you, right? Because, you know, Roth IRAs is a hot topic, hot term right now in particular. But it doesn’t always apply. It doesn’t always make sense for each and every individual or family. Right. So we have to identify and make sense for you in the first place, then we have to identify how much conversion makes sense for you and your situation. But as far as difficulty in making the decision and converting the money, no, that’s not difficult. But the planning aspect is the difficulty,

Brian Quaranta – 06:01

although it can take time, so don’t wait to the very last minute at the end of the year, because you could miss the ability to do your Roth conversion, and miss out on a tax year. So if you’re going to do it, have a plan and executed, you know, probably September, October, November, you know, but I wouldn’t go past, you know, first week of November. And it’s

Neil Major – 06:18

a great point, because, you know, to do Roth conversions, we only have until December 31. Yeah, a lot of people think that we have until April 15. Right. So we only have till December 31st. And we typically do want to wait towards the latter part of the year, just in case we don’t get any extra bonuses, or income or inheritance or anything like that. Yeah. But we can’t wait too long. Because in particular, at the end of the year, sometimes these institutions can be a little slow, with processing requirement of distributions and all kinds of different things that people are doing.

Cynthia de Fazio – 06:52

Alright, thank you so much, Brian, this is a great question. It says Brian, should people consider using life insurance to build tax free cash value? And if so how is that done? Yeah,

Brian Quaranta – 07:02

so life insurance is a great tool, if used properly. So there’s many reasons why we buy life insurance. Number one is, maybe we’re just getting started out in life, we have, you know, a family, some young kids, and you haven’t had enough time to accumulate assets yet. So if you die, you want to make sure that there’s money there for your family. So you would buy a life insurance policy. But other ways to use life insurance as you can use it as a retirement saving strategy where you can choose to have a cash value life insurance policy, which would allow you to build a sum of cash value within the life insurance policy itself, which later on in life can be utilized as tax free income. It’s also a great way to handle the mitigation of estate taxes, and, of course, leaving inheritance to your family. Because one of the great advantages of life insurance, and if you look at a lot of the wealthy families out there, including a lot of our Congress, people and senators, and, you know, people have, you know, with large corporations, billionaires, they have large, large life insurance as part of their planning. And the reason is, is because we can pass a large sums of money on to our family, tax free. So the great advantage of life insurance is the death benefit alone is tax free. So we I do this personally with my own family. So I’ll give you an example of a strategy that I’ve used with my mom and dad. So my parents are in their late 70s. My dad worked very, very hard for his money, he had to make gum rewards catalog story. Remember Montgomery words? So I grew up with my dad having this McHenry words catalog store, Montgomery, Ward’s filed bankruptcy, why my dad had the store, so he lost a store because of the bankruptcy. And of course, my family, we went through tough times financially, it’s part of the reason I have the passion to do what I do today, because I understand the importance of having a plan because life happens. Sure, right. But my dad, you know, today is have now retired. And, you know, what I did for my family was I actually bought a life insurance policy on my father. Now why would I do that? The reason I would do that is number one to protect my mom, okay? Because if something were to happen to my dad, there would be a loss of income. So to help further protect my mom, the reason I bought a life insurance policy on my father, was that there would be a sum of money there that would be paid out to the estate, to help my mom continue on with her life, right? So the quality of her life is there. Why else I do? Well, what happens if my dad gets sick and we need to use the money to pay for care after he got care and maybe he passes that would replace the money that we paid out for the care, but let’s just say he dies of old age and natural causes. It becomes an inheritance to my brother, my sister and myself tax free. So that policy is about a half a million dollar policy. It cost me about 10 $1,000 a year, you know, we bought it when my dad was about 74 years old. So do the math. If my dad dies at the age of 84, that means I’ve paid into the policy for 10 years. So I paid $100,000 into the pile policy, I get $500,000 tax free. Where am I going to get that? There’s no stock bond mutual fund, I can buy it and get that return. What if my dad lived 20 years, that means I put $200,000 into policy, and I got back $500,000 tax free. So this is a great way for families to leverage the wealth that they’ve accumulated over their lifetime and exponentially give the next generation even much more.

Cynthia de Fazio – 10:37

Yeah, yeah, absolutely. Well, Brian, I know that you and Neil have a very special offer to present to the viewers at home today. Let’s talk about what that is. And then open the phone lines.

Brian Quaranta – 10:46

Well, we developed our right track retirement systems solely to give you peace of mind and clarity going into retirement. And it goes over five key areas with you income, taxes, investments, health care and estate planning. And this is very important because you don’t have a plan until you handle those five key areas. You might have investments, you might have an IRA, you might have a 401k That’s great. That’s a good job. However, a plan takes into account all five of those key areas. So it’s not very often you get an opportunity to come in, sit down with a fiduciary at no cost. We’re gonna give this right track retirement view out complimentary. All you got to do is pick up the phone and call us today. The number is 1-888-382-1298.

Cynthia de Fazio – 11:27

Brian, thank you so much, Neil, thank you so much to the viewers at home, the phone number to call is on your screen. That number is 888-382-1298. We know you have a lot of questions about how to retire with confidence how to retire comfortably. Brian O’Neill have the answers for you, all you have to do is take advantage of picking up the phone and calling in today. At 883821298. We have to take a very short commercial break. But when I come back, I have more viewer questions. So stay tuned.

Brian Quaranta – 11:54

So everybody can tell you how to invest your money. There’s not a lot of people out there and a lot of firms that can teach you how to use your money. Most people also tell you that they’re scared. And the reason they’re scared is because they’re afraid of running out of money.

Neil Major – 12:08

The last thing you want to do is have a really good job and you’re in your 60s retire, be looking for work again in the late 70s.

Brian Quaranta – 12:16

The average person might say, well, a good portfolio would be a good mix of stocks, bonds, mutual funds. A good portfolio is all designed around the five key areas income, taxes, investments, health care and legacy planning.

Neil Major – 12:30

There’s we’re not just product pickers here, what we do best here as we build retirement plans,

Brian Quaranta – 12:36

nine out of 10 people when they walk through the door would ask us, we just want to know if we’re on the right track. And I always say if you’re not on the right track, when would be a good time to know it. Probably now,

Neil Major – 12:46

people you know can actually see a vision once we start to really build out their plan.

Brian Quaranta – 12:52

This is about you if you’re not getting what you need. And you feel that when you walk out of the advisors office, it’s time to get a second opinion. And you can’t get a second opinion from the person that gave you the first the difference at secure money advisors as a fiduciary firm, we help you manage the risk, build the income and give you the retirement withdrawal.

Cynthia de Fazio – 13:24

And welcome back to on the money with secure money. My name is Cynthia De Fazio and I’m joined today by Brian quanta. He is president and founder of secure money advisors as well as Neil major senior investment advisor. Gentlemen, a wonderful show that we’re having today is so much fun. It’s viewer questions. So if you don’t mind, we’re gonna keep going. Okay. All right, Neil, this next one is for you. It says Neil, can you help me understand what exactly is rebalancing a portfolio? And is it necessary?

Neil Major – 13:51

Yeah, absolutely. I mean, you know, as far as our clients go, you know, when we look at rebalancing, we kind of look at it a little bit different way, right? So we build out buckets of money, right? So we build out a safe bucket. Well, first of all, we build out a bank or a bank, a pension bucket and a risk bucket. Right? Okay. So we want to make sure that our pension bucket is going to be the money that we use in the short term. And when I say short term, I’m talking 10 to 12 years, that’s the money that we’re going to use over the next 10 to 12 years. Now, on our next bucket, we’re going to utilize the market. So we’re going to expose ourselves to some market risk. Now the goal is there. Our income bucket is going to be our short term money. So we have time on this risk bucket. Okay. So as we start to spend down our income bucket, right, in our risk bucket starts to grow. What we want to do in a simple form is start to rebalance, right? We want to make sure that we’re not overexposed to stock market risk, when we start to need some more income or things like that. So you can look at rebalancing a lot of different ways. In the most simple form, yeah, we absolutely want to make sure that we’re always positioned properly.

Brian Quaranta – 15:06

And rebalancing for us, as Neil said is different. I mean, you know, what we’re talking about is rebalancing the the distribution plan, right? If you look at real rebalancing, and what it really means, it means let’s say I have three mutual funds in a portfolio, okay? And they all have $25,000 in it. And then six months from now, one has 25,000, and the other has 30. And the other has 50 rebalancing would be that we would take that money and we divide it back evenly amongst the three positions, right? That’s rebalancing. I’m not a big fan of it, because you may be rebalancing into a position that’s actually not doing well. So I might be taking money from a position that’s doing really well. And rebalancing into a position that’s not doing well. And a lot of mutual funds, including target date funds, which are very popular in 401k. Plans. rebalance automatically. So it just, it just does it, there’s no, there’s no thought to it. There’s no tactical strategy whatsoever, they just do it. So not a big fan of rebalancing because you could be missing out on opportunity by doing that. And you got to ask your advisor if you are utilizing a mutual fund or some type of portfolio, does it rebalance? And if so, does it do it automatically? I’m not a big fan of automatic rebalancing, it’s okay to change the asset classes based on economic cycle, right? Meaning if the economic cycle, all of a sudden goes from good to bad, there’s gonna be different asset classes we might want to own during a down market versus an up market and rebalancing or reallocating, to different asset classes may be the better approach.

Cynthia de Fazio – 16:44

Okay. All right. Thank you both so much, Brian, this question is for you this next one, it says, Brian, should investors be concerned with our governments trillions of dollars in debt?

Brian Quaranta – 16:56

Well, here, here’s what I was saying. So 50% of the money in circulation right now, 50% of the money in circulation right now, was printed over the last 12 months. I think about 50% of the money in circulation, from the time we started printing dollars was printed over the last 12 months, it’s hard for your mind to even wrap itself around it. Of course, there’s concerns the concerns are what we’re seeing right now, inflation, cost of living going up, you know, too many dollars chasing too little goods. So, you know, should we be concerned? You know, all I can tell you is having a good plan should address it to the best of our ability, based on what we have access to today. And based on the laws that exist today. You know, should we all go into a panic? No, absolutely not. America goes through times, as we always have. And we seem to get through them as a country together.

Cynthia de Fazio – 17:51

Yeah. Yeah, absolutely. Thank you so much, Brian. Neil, this is a great question as well. It says, Is there a certain age where people should limit their exposure to the stock market? What advice do you have on this subject?

Neil Major – 18:04

Yeah, of course. I mean, as we get closer and closer to retirement, we start to want to dial down our risk. That’s obvious, right? We don’t ever want to push our retirement date out further, because we dealt with market volatility. And we thought we were going to retire with X amount of dollars. And we’re not even close because of market loss, right? So we want to really establish and start to build out the plan, five to 10 years in advance, that’s the financial redzone, right, we want to make sure that we have a solid foundation and plan we want, we still want a need market risk. But we have to establish some of our money in providing principal protection gets good reasonable rates of return on a portion of our portfolio. And if we deal with a lot of market volatility, our retirement dates not going to be impacted, our incomes not going to be impacted. So there’s definitely a redzone there about five to 10 years, I

Brian Quaranta – 18:57

think the other thing to point out a better rule of thumb that people could use that’s a little bit more black and white, is how much money should I have in the market versus how much money I should have saved can be simply calculated by using something called the rule of 100. So what we do is we take 100 minus your age. So let’s just suppose that you’re 60 years old, so we take 100 minus 60, which equals 40. Well, your age is how much money you should consider protecting or making safe, right? So 60% of this person’s portfolio should be protected from market volatility, the other 40% could have risk associated with it. And that’s again, that’s a rule of thumb. You can go one way or the other depending on your risk tolerance, and what your purpose and needs are for your money.

Cynthia de Fazio – 19:39

Okay. All right. Great. Thank you both so much. Well, Brian, I know that you and Neil have a very special offer to present to the viewers at home today. Let’s talk about what that is again before we reopen the year. Our right

Brian Quaranta – 19:48

track Retirement System folks truly was designed with you in mind to help get you on the right track to figure out where you are right now and where you need to go and for the next 10 callers who call in right now. We are going to give you a call complimentary right track retirement review. It’s going to help identify and go over five key areas with you your income, your taxes, your investments, your health strategy and your estate strategy. So if you call us right now, you’ll get a complimentary meeting with us. It’s 1-888-382-1298. This is not the time to procrastinate. Don’t kick the can down the road on this one. Call us today. And schedule now again. That’s 1-888-382-1298.

Cynthia de Fazio – 20:29

Brian, thank you so much, Neil, thank you so much to the viewers at home, the phone number to call is once again on your screen. That number is 888-382-1298. Like Brian said, if you’re not on the right road for retirement, when you want to know that today, this is the perfect opportunity to pick up the phone and call in. Again, the number is 888-382-1298. Don’t go anywhere, we have time for a few more viewer questions, and one of those could be your very own. Stay tuned.

Brian Quaranta – 20:57

If I could help you increase your income, if I could help you pay less taxes, if I could help you potentially maximize the returns of your investments while reducing risk reducing fees if I could help you prepare for a health event or more importantly, when the good Lord decides to take your home to make sure that the money you’ve accumulated over your lifetime goes to your family and to your charities rather than the IRS. Would that be worth the time to come in and get a second opinion.

Cynthia de Fazio – 21:28

And welcome back to on the money with secure money. My name is Cynthia De Fazio and I’m joined today by Brian quanta. He is president and founder of secure money advisors, as well as Neil major senior investment advisor. Settlement. I love today’s show, because obviously the viewer questions are so diversified. They’re coming in from all different directions and asking all types of questions you tell

Neil Major – 21:48

me what we deal with on a day to day basis?

Cynthia de Fazio – 21:51

Well, Neil, you are up next, actually. So let me ask you a question. This is actually involving so Security says Neal, what are the most important things to do when planning to take Social Security?

Neil Major – 22:03

Well, that’s a great question. I mean, that’s a very common question. When should I take Social Security? What do I need to understand and know about Social Security? And it really comes down to, we never know the answer to your question, we really have to build out the plan to understand what makes sense for you and your particular situation, right? We know that you’re going to have a full retirement age. And at that age, you’re going to get your 100% of your primary insurance amount. And if you decide to take it earlier than that, you’re going to take a discount, right? So that might make sense for some, some of the things that we want to know and ask you about are well, what’s your health? Like? What’s your personal health? Like? What’s your family longevity, like, you know, if you’re someone that doesn’t think based on your genes and your personal health, that you’re not going to live past 75 years old? Maybe our strategy is to take it a little bit sooner than later. Right? But if you’re somebody who plans, you know, most people in your family live into their 90s Well, maybe we build an income strategy that we, you know, utilize the investments to provide some income for a number of years, before we turn on that Social Security, because basically, the longer we wait for Social Security, we’re gonna get an 8% increase each and every year. So that’s important to know. Right? So there’s a lot of different things about Social Security. And depending on the situation, we can help guide you and steer you in the right direction.

Brian Quaranta – 23:27

Okay, a lot of people come in, they’ll say, I wanted to lay taking my Social Security. Okay, I understand if you delay it, you’re going to get the most amount. Yeah. But when we look at the plan, and we run the numbers, if they were to delay taking Social Security, and they would still want to retire, they would spend down so much of their retirement assets. That literally the time we got to turn Social Security on, they’ve spent down so much of their money that it doesn’t make them comfortable to see that they don’t have a whole lot of money left. Right now they have to have social security at a higher amount. But now you have no money, no money or little money in your retirement accounts. You know, I heard a very famous I don’t even know if we want to call this person a retirement specialist, but they are really tight are they I would say there are financial talking head right on television. Okay, heard them give advice at one time, that she would like to see somebody delay their Social Security for as long as they can and use 100% of their retirement savings before they would even turn on Social Security. And my reverse thoughts were so we’re going to leave them broke by the time they turn so security on what happens if Social Security says we’re reducing benefits. What happens is Social Security campaign, you’re going to spend all your money down. Remember this, folks, when it comes to social security. It’s a benefit. You’re only going to receive why you’re alive. Okay? The longer you collect on it, the more money that you’ll get. Alright, so at the end of the day, if I can subsidize your retirement income needs, with something that you’re guaranteed from from the from the government benefit that’s only available to wire light, it’s less money we have to take from the money you’ve accumulated in your retirement accounts, which is going to be a lot better.

Neil Major – 25:08

The other thing, Cynthia is, you know, Brian and I are in a conference room every day with these people, right? Sure. And so let’s say a couple needs $75,000 of retirement income, and Social Security was to provide 50,000. Right? So not many people, when we start to build out the plan, if we talk about deferring Social Security, maybe till 70 Instead of full retirement age, are comfortable pulling that amount of income out of their retirement account,

Brian Quaranta – 25:33

that means 75,000 out, they like

Neil Major – 25:37

the guarantee of getting the 50,000 from Social Security, it gives them more peace of mind. Sure, yeah. Showing them

Brian Quaranta – 25:42

that then now they’re only responsible for pulling $25,000 from their investment. Yeah. You know, which, which is a little bit nicer on them. So

Neil Major – 25:49

you know, talking heads, you know, can give opinions and they can be worthy opinions. It’s just sometimes, you know, yeah, not with dealing people face to face and how we plan. I would like

Brian Quaranta – 25:59

to say they’re a little bit more entertainers than they are.

Cynthia de Fazio – 26:02

Yeah, exactly. Exactly. Well, Brian, we only have a couple minutes left in the show. But I want to ask you one more question. It says, what exactly is a retirement income gap? Can you explain

Brian Quaranta – 26:12

exactly what we just talked about? So Neil was just talking about, you know, having a couple that deed $75,000 for income, well, if they can get $50,000 A year from Social Security, right, and they and they need 75, the 50,000 they get from Social Security minus the 75 they need is a $25,000 income gap. And that’s what people are having to solve is the income gap. How are we going to generate the income for that income gap. And that’s something we do really, really well at secure money advisors. It’s why we built the right track Retirement System. It helps you do this analysis, figure out what your income gap is, figure out how to calculate taxes, your expenses, to get your income and distribution plan dialed in to the point that you can confidently take your money without worrying about running out of money, not worry about market volatility, not worry about the economic environment based on what’s going on in the government or what political environment we’re in the right track Retirement System truly is a plan that will help you give you the peace of mind and security you need in retirement. So for the next 10 callers who call in right now, that’s a complimentary right track retirement review. You’re going to schedule with our office, you’re going to come in we’re going to sit down and we’re going to have a conversation with you, just like we’re having at this desk here today. But it’s going to be directly to you. So again, 1-888-382-1298

Cynthia de Fazio – 27:34

Brian, thank you so much, Neil, thank you so much to the viewers at home. Most specifically we’d like to thank you for spending time with us today. That number to call his 888-382-1298. Again, thank you for watching, be safe, be happy, be blessed. And we so look forward to seeing you back here again. One week from today. Take care.